Russia, the world's fourth-largest steel producer, will impose three-year duties on stainless steel imports from the European Union to protect domestic producers from what it called dumping.
A duty of 84 euro cents ($1.10) will be levied on each kilogram of steel that has a nickel content of 2.5% or higher from March 20, according to an order signed by Prime Minister Mikhail Fradkov and published in the official Rossiiskaya Gazeta newspaper today. „The duty's pretty huge,” said Vladimir Zhukov, an analyst with Moscow-based Alfa Bank. He noted that export-grade stainless steel sheet in the EU is currently sold at $4,350 a ton, which means the Russian levy would increase the price by a quarter. The Russian government's decision will benefit OAO Mechel, the country's biggest producer of stainless steel products, though the company only generates a small part of sales from products covered by the duty. The Moscow-based steelmaker, which has lobbied for such duties for three years, had revenue of $101 million, or less than 4% of total sales, from stainless steel products in 2005. The company's output of stainless steel with nickel content was 13,000 tons that year, Alexei Sotskov, a spokesman for Mechel, said today by phone. European steelmakers likely to be affected by the duties include Arcelor Mittal and Finland's Outokumpu Oyj, though the impact on their sales is likely to be marginal because Russia's market for stainless steel sheet is small, analysts said. Russia produced 105,500 tons of stainless steel sheet last year, from a total crude steel output of 70.8 million tons. „It could be that some company wants to expand their stainless steel production, and they are looking for a firewall to protect the market,” Alfa's Zhukov said. Russia also imposes duties on zinc and copper imports, he said. (Bloomberg)